The oil market just got a cold dose of reality on Monday. Prices jumped more than 2% as Israeli Prime Minister Benjamin Netanyahu made it clear that hostilities with Iran are far from finished. His blunt assessment on CBS’s “60 Minutes” wasn’t diplomatic hedging. “There’s work to be done,” he said, spelling out what that means: removing enriched uranium, dismantling enrichment sites, eliminating Iranian proxies, and stopping ballistic missile production.
The timing matters. U.S. President Donald Trump simultaneously rejected Iran’s counteroffer to de-escalate tensions, calling it “TOTALLY UNACCEPTABLE” in a post that matched his dismissive tone. Between the two, the market read a clear signal: don’t expect a near-term resolution.
U.S. West Texas Intermediate futures climbed to $97.88 per barrel, while international benchmark Brent crude rose to $103.93. Both are up roughly 40% since the U.S. and Israeli-led campaign against Iran began on February 28.
When Supply Shocks Meet Geopolitical Stalemate
What’s striking is how fragile the current price equilibrium feels. According to analysis from Citi, oil has been cushioned by high inventories, strategic petroleum reserve releases, weaker demand in developing economies, and sporadic hints of de-escalation. But those buffers only go so far.
Citi’s analysts maintain that the real risk remains tilted toward higher prices. The kicker: Iran still controls the timeline and terms of any deal to reopen the Strait of Hormuz, the world’s most critical energy chokepoint. “We assume that the regime will make a deal around end-May,” Citi wrote, “but we continue to see risks skewed towards this timeline being pushed out and/or a partial reopening, which means disruptions for longer.”
In other words, expect volatility to stick around.
The Human Cost Nobody’s Talking About
Felipe Elink Schuurman, CEO of Sparta Commodities, offered a sobering comparison on CNBC that cuts through the commodity price noise. During the coronavirus pandemic, the world lost 9 million barrels per day of demand. We’re now losing roughly the same amount in supply due to geopolitical disruption. That’s a massive hole to fill.
The difference is brutal. “The richer countries are going to pay up,” Schuurman said. “Maybe you don’t see $200 on crude, but you will see that on a regular basis on products, which is what people consume.”
His forecast isn’t optimistic. Poorer nations face humanitarian crises. Europe braces for economic pain. The U.S. enters political territory. That’s not a market prediction. That’s a warning about real-world consequences when energy supply chains fracture and prices stay elevated for prolonged periods.
Where Business Goes From Here
The current standoff reveals something uncomfortable about global energy markets: they’re held together by threads. Inventories can absorb shocks for only so long. Strategic reserves get depleted. Demand destruction—the polite term for people and companies using less energy because they can’t afford it—eventually kicks in. But that adjustment happens through pain, not through market efficiency.
Netanyahu’s Sunday night comments and Trump’s swift rejection of negotiations suggest neither side sees imminent compromise. If anything, both moves signal conviction about their respective positions. That’s the kind of confidence that tends to keep prices elevated or push them higher.
The real question isn’t whether oil will hit $200 a barrel. It’s whether the world’s poorest will absorb the cost while the wealthy negotiate.
